Squeezing the Procurement Sponge: IDIQ Contracts Limit Competition within the Rules

This in the first in a series of six (6) newsletters about federal Indefinite Delivery/Indefinite Quantity (IDIQ) contracts and their growing importance in the federal market.

As we speak, federal buyers are processing their procurement dollars through IDIQ contracts. Companies new to the federal market say, "What is an IDIQ?  I don't understand the acronym."

As defined by Wikipedia and partially excerpted here:

IDIQ is a contracting acronym meaning Indefinite Delivery Indefinite Quantity. This is a type of contract that provides for an indefinite quantity of supplies or services during a fixed period of time. The legal origin of IDIQ contracts is the Federal Acquisition Regulation (FAR), section 16.501(a). IDIQ awards are usually for base years as well as option years. The Government places delivery orders (for supplies) or task orders (for services) against a basic contract for individual requirements.

In essence, an IDIQ contract is a "pre-approved federal price list." Awards under an IDIQ are usually limited to a small number of companies.  It is worth noting that GSA schedule contracts are an exception to this rule since these contracts are open to all and there is no limit on the number of awards that can be handed out. With most IDIQs, the select group of companies receiving awards are the only companies that are allowed to bid on task orders using their pre-approved price list.

The IDIQ rules in the Federal Acquisition Regulation allow federal buyers to legally limit competition to make buying faster and cheaper. Without IDIQs, the procurement system would be so overwhelmed that it would grind to halt. An  award through an IDIQ task order can be made in a matter of weeks instead of the time it takes for public bids to get to award, which can be one year or more. Not to mention that IDIQ awards tend to be "under the radar" and are not subject to the same level of public scrutiny and protests as public bids.

Call Richard White for a free session on contracting and procurement in the new federal market.  Phone: 301.908.0546

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